ViacomCBS Reports Q3 2021 Earnings Results

Nov 04, 2021
By ViacomCBS Staff
  • Total Company Revenue Increased 13% Year-Over-Year, Reflecting Growth Across All Revenue Streams
  • Quarterly Global Streaming Revenue Surpassed $1 Billion for the First Time, with Growth of 62% Year-Over-Year, Driven by Strength in Subscriptions and Advertising
    • Added 4.3M Global Streaming Subscribers to Reach Nearly 47M in the Quarter, and Achieved 79% Year-Over-Year Growth in Streaming Subscription Revenue
    • Subscriber Acquisition and Consumption on Paramount+ Fueled By a Diverse Global Content Offering, Including A Quiet Place Part IIPaw Patrol: The Movie, the Return of the NFL, and the New CBS Fall Season
    • Generated 48% Year-Over-Year Growth in Streaming Advertising Revenue, Largely Driven by Pluto TV, Which Grew Global Monthly Active Users (MAUs) to Over 54M and Revenue by 99% Year-Over-Year
  • Announced Broad Distribution Agreement with T-Mobile to Provide Its Customers with Paramount+

STATEMENT FROM BOB BAKISH PRESIDENT & CEO

"ViacomCBS continued to show tremendous momentum across the business as we executed against our strategy. We added 4.3M global streaming subscribers, raising our total to nearly 47M, driven by the scaling of the diverse content offering on Paramount+. Looking forward, we're thrilled about the fresh array of content coming to Paramount+ in the next few months and can't wait to share it with our global audience. Our strategy is clearly working and we'll continue to use the power of global content, distribution and market expansion to drive scale."

Q32021 RESULTS*

                                             

$ IN MILLIONS, EXCEPT PER SHARE AMOUNTS

   

Three Months Ended September 30

 

Nine Months Ended June 30

GAAP

 

2021

 

2020

 

B/(W)%

 

2021

 

2020

 

B/(W)%

Revenue

 

$

6,610

   

$

5,837

   

13

%

 

$

20,586

   

$

18,411

   

12

%

▪Advertising**

 

1,855

   

1,828

   

1

%

 

6,633

   

5,733

   

16

%

▪Affiliate**

 

2,102

   

2,059

   

2

%

 

6,284

   

5,956

   

6

%

▪Streaming

 

1,079

   

666

   

62

%

 

2,878

   

1,673

   

72

%

▪Theatrical

 

67

   

6

   

n/m

 

202

   

176

   

15

%

▪Licensing and other

 

1,507

   

1,278

   

18

%

 

4,589

   

4,873

   

(6)

%

Operating income

 

$

879

   

$

903

   

(3)

%

 

$

3,633

   

$

3,056

   

19

%

Diluted EPS from continuing operations attributable to ViacomCBS

 

$

0.69

   

$

0.92

   

(25)

%

 

$

3.62

   

$

2.47

   

47

%

                         

Non-GAAP

                       

Adjusted OIBDA

 

$

1,020

   

$

1,052

   

(3)

%

 

$

3,887

   

$

3,949

   

(2)

%

Adjusted diluted EPS from continuing operations attributable to ViacomCBS

 

$

0.76

   

$

0.83

   

(8)

%

 

$

3.23

   

$

3.16

   

2

%

                                             

† Non-GAAP measures are detailed in the Supplemental Disclosures at the end of this release.

 *During the fourth quarter of 2020, ViacomCBS entered into an agreement to sell Simon & Schuster, which was previously reported as the Publishing segment. Simon & Schuster has been presented as a discontinued operation in the company's consolidated financial statements for all periods.      

**Excludes streaming revenue.

   n/m = not meaningful

 

 

OVERVIEW OF Q3 REVENUE

REVENUE BY TYPE

  • Advertising revenue grew 1% year-over-year, reflecting an improved advertising marketplace, partially offset by lower linear impressions, lower political advertising, and the absence of CNET Media Group ("CMG") as a result of its sale in the fourth quarter of 2020.
  • Affiliate revenue increased 2% year-over-year, reflecting higher reverse compensation and expanded distribution.
  • Streaming revenue rose 62% year-over-year:
    • Streaming advertising revenue grew 48% year-over-year, driven by growth in advertising on Pluto TV and Paramount+.
    • Streaming subscription revenue grew 79% year-over-year, reflecting strong subscriber growth from the company's subscription services.
  • Theatrical revenue reflects the releases of Paw Patrol: The MovieSnake Eyes: G.I. Joe Origins, and the second quarter release of A Quiet Place Part II, while the prior-year period was impacted by the closure or reduced capacity of movie theaters in response to COVID-19.
  • Licensing and other revenue, which includes fees from the licensing of our internally produced television and film programming across third party platforms, as well as fees generated from home entertainment, consumer products, and live events, increased 18% year-over-year.

 

$ IN MILLIONS

Three Months Ended September 30

 

Nine Months Ended September 30

 

2021

 

2020

 

       $ B/(W) %

 

2021

 

2020

 

       $ B/(W) %

Advertising*

$

1,855

   

$

1,828

   

$

27

   

1

%

 

$

6,633

   

$

5,733

   

$

900

   

16

%

Affiliate*

2,102

   

2,059

   

43

   

2

   

6,284

   

5,956

   

328

   

6

 

Streaming

1,079

   

666

   

413

   

62

   

2,878

   

1,673

   

1,205

   

72

 

▪Advertising

531

   

360

   

171

   

48

   

1,461

   

873

   

588

   

67

 

▪Subscription

548

   

306

   

242

   

79

   

1,417

   

800

   

617

   

77

 

Theatrical

67

   

6

   

61

   

n/m

 

202

   

176

   

26

   

15

 

Licensing and other

1,507

   

1,278

   

229

   

18

   

4,589

   

4,873

   

(284)

   

(6)

 

Total Revenue

$

6,610

   

$

5,837

   

$

773

   

13

%

 

$

20,586

   

$

18,411

   

$

2,175

   

12

%

                                                           
                                                           

*Excludes streaming revenue     n/m = not meaningful

 

 

GLOBAL STREAMING HIGHLIGHTS

  • Global streaming subscribers rose to nearly 47M, adding 4.3M subscribers in the quarter.
    • Subscriber additions in the quarter were led by Paramount+.
      • Domestically, Paramount+ saw strong subscriber sign-ups and engagement from a variety of content, including A Quiet Place Part IIPaw Patrol: The Movie, as well as the start of the NFL season.
      • Internationally, Paramount+ launches to date have had strong momentum, led by progress in Latin America, Brazil, Australia and Canada.
    • SHOWTIME OTT benefited from originals, including BillionsAmerican Rust and The Chi.
    • Announced the signing of SkyShowtime, a joint venture with Comcast that will include premium and original content from both companies.
      • SkyShowtime will reach more than 20 European territories encompassing 90 million homes.
  • Pluto TV revenue grew 99% year-over-year, as MAUs increased to over 54M in the quarter, helped by international growth.

 

 

REPORTING SEGMENTS

TV ENTERTAINMENT

 

  • In Q3, CBS was the most-watched network in Daytime and Late Night. Hits like The Late Show With Stephen Colbert and Big Brother were leaders in their respective categories among key demos.
  • Revenue grew 24% year-over-year, primarily driven by higher licensing, streaming, and affiliate revenue, partially offset by lower advertising revenue.
    • Advertising revenue decreased 2% year-over-year, primarily reflecting an unfavorable comparison to the prior-year revenue benefit from political advertising and the absence of CMG, partially offset by an improved advertising market in 2021.
    • Affiliate revenue grew 4% year-over-year, driven by growth in reverse compensation.
    • Streaming revenue rose 81% year-over-year, reflecting subscriber and advertising growth at Paramount+.
    • Licensing and other revenue increased 79% year-over-year, driven by the timing of program availability primarily due to COVID-19 production shutdowns in the prior-year, and a higher volume of domestic licensing.
  • Adjusted OIBDA decreased 21% year-over-year, reflecting the company's increased investment in Paramount+.

 

$ IN MILLIONS

Three Months Ended September 30

 

Nine Months Ended September 30

 

2021

 

2020

 

       $ B/(W) %

 

2021

 

2020

 

       $ B/(W) %

Revenue

$

2,924

   

$

2,354

   

$

570

   

24

%

 

$

9,244

   

$

7,588

   

$

1,656

   

22

%

▪Advertising*

943

   

966

   

(23)

   

(2)

   

3,838

   

3,134

   

704

   

22

 

▪Affiliate*

698

   

674

   

24

   

4

   

2,082

   

1,926

   

156

   

8

 

▪Streaming

390

   

216

   

174

   

81

   

1,062

   

613

   

449

   

73

 

▪Licensing and other

893

   

498

   

395

   

79

   

2,262

   

1,915

   

347

   

18

 

Expenses

2,653

   

2,011

   

(642)

   

(32)

   

8,308

   

6,280

   

(2,028)

   

(32)

 

Adjusted OIBDA

$

271

   

$

343

   

$

(72)

   

(21)

%

 

$

936

   

$

1,308

   

$

(372)

   

(28)

%

                                                           

*Excludes streaming revenue

 

 

CABLE NETWORKS

  • In Q3, ViacomCBS had the most programs among the top 25 original cable series among P18-49, P18-34 and K2-11, more than any other cable family, including the top two Kids programs with Paw Patrol and The Patrick Star Show.
  • Revenue increased 13% year-over-year, reflecting growth across all revenue streams.
    • Advertising revenue increased 6% year-over-year, largely driven by an improved advertising marketplace, partially offset by lower linear impressions.
    • Affiliate revenue grew 1% year-over-year, reflecting expanded vMVPD distribution and rate increases, partially offset by subscriber declines.
    • Streaming revenue increased 53% year-over-year, largely fueled by advertising revenue growth from Pluto TV, as well as growth in subscribers for subscription streaming services.
    • Licensing and other revenue increased 23% year-over-year, primarily driven by the licensing of programming to Paramount+.
  • Adjusted OIBDA increased 5% year-over-year, reflecting the above-mentioned revenue growth, partially offset by an increased investment in streaming services and a higher level of original programming.

 

$ IN MILLIONS

Three Months Ended September 30

 

Nine Months Ended September 30

 

2021

 

2020

 

       $ B/(W) %

 

2021

 

2020

 

       $ B/(W) %

Revenue

$

3,458

   

$

3,061

   

$

397

   

13

%

 

$

10,192

   

$

9,151

   

$

1,041

   

11

%

▪Advertising*

917

   

862

   

55

   

6

   

2,806

   

2,622

   

184

   

7

 

▪Affiliate*

1,404

   

1,385

   

19

   

1

   

4,202

   

4,030

   

172

   

4

 

▪Streaming

689

   

450

   

239

   

53

   

1,816

   

1,060

   

756

   

71

 

▪Licensing and other

448

   

364

   

84

   

23

   

1,368

   

1,439

   

(71)

   

(5)

 

Expenses

2,552

   

2,195

   

(357)

   

(16)

   

6,977

   

6,206

   

(771)

   

(12)

 

Adjusted OIBDA

$

906

   

$

866

   

$

40

   

5

%

 

$

3,215

   

$

2,945

   

$

270

   

9

%

                                                           

*Excludes streaming revenue

 

 

FILMED ENTERTAINMENT

  • Revenue declined 2% year-over-year, driven by lower licensing revenues, partially offset by the benefit of current quarter theatrical releases.
    • Theatrical includes revenues from the third quarter releases of Paw Patrol: The MovieSnake Eyes: G.I. Joe Origins, and the second quarter release of A Quiet Place Part II, while the prior-year period was impacted by the by the closure or reduced capacity of movie theaters in response to COVID-19.
    • Licensing and other revenue decreased 12% year-over-year due to lower volume of programming produced for third parties.
  • Adjusted OIBDA declined $16 million year-over-year, reflecting lower profits from current year releases as a result of higher distribution costs, as well as distribution costs associated with anticipated releases.

 

$ IN MILLIONS

Three Months Ended September 30

 

Nine Months Ended September 30

 

2021

 

2020

 

       $ B/(W) %

 

2021

 

2020

 

       $ B/(W) %

Revenue

$

580

   

$

590

   

$

(10)

   

(2)

%

 

$

2,244

   

$

2,048

   

$

196

   

10

%

▪Theatrical

67

   

6

   

61

   

n/m

 

202

   

176

   

26

   

15

 

▪Licensing and other

513

   

584

   

(71)

   

(12)

   

2,042

   

1,872

   

170

   

9

 

Expenses

542

   

536

   

(6)

   

(1)

   

1,930

   

1,851

   

(79)

   

(4)

 

Adjusted OIBDA

$

38

   

$

54

   

$

(16)

   

(30)

%

 

$

314

   

$

197

   

$

117

   

59

%

                                                           

n/m = not meaningful

 

 

BALANCE SHEET & LIQUIDITY

  • As of September 30, 2021, the company had $4.8B of cash on its balance sheet and a committed $3.5B revolving credit facility that remains undrawn.

ABOUT VIACOMCBS

ViacomCBS (NASDAQ: VIAC; VIACA) is a leading global media and entertainment company that creates premium content and experiences for audiences worldwide. Driven by iconic consumer brands, its portfolio includes CBS, Showtime Networks, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount+, Pluto TV and Simon & Schuster, among others. The company delivers the largest share of the U.S. television audience and boasts one of the industry's most important and extensive libraries of TV and film titles. In addition to offering innovative streaming services and digital video products, ViacomCBS provides powerful capabilities in production, distribution and advertising solutions.

For more information about ViacomCBS, please visit www.viacomcbs.com and follow @ViacomCBS on social platforms.

VIAC-IR

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This communication contains both historical and forward-looking statements, including statements related to our future results and performance. All statements that are not statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward-looking statements reflect our current expectations concerning future results and events; generally can be identified by the use of statements that include phrases such as "believe," "expect," "anticipate," "intend," "plan," "foresee," "likely," "will," "may," "could," "estimate" or other similar words or phrases; and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause our actual results, performance or achievements to be different from any future results, performance or achievements expressed or implied by these statements. These risks, uncertainties and other factors include, among others: changes in consumer behavior, as well as evolving technologies, distribution platforms and packaging; the impact on our advertising revenues of changes in consumers' content viewership, deficiencies in audience measurement and advertising market conditions; our ability to maintain attractive brands and our reputation, and to offer popular programming and other content; increased costs for programming, films and other rights; competition for content, audiences, advertising and distribution; the potential for loss of carriage or other reduction in or the impact of negotiations for the distribution of our content; losses due to asset impairment charges for goodwill, intangible assets, FCC licenses and programming; the risks and costs associated with the integration of the CBS Corporation and Viacom Inc. businesses and investments in new businesses, products, services and technologies, including our streaming initiatives; evolving business continuity, cybersecurity, privacy and data protection and similar risks; content infringement; the impact of COVID-19 (and other widespread health emergencies or pandemics) and measures taken in response thereto; domestic and global political, economic and/or regulatory factors affecting our businesses generally; liabilities related to discontinued operations and former businesses; the loss of key talent and strikes and other union activity; potential conflicts of interest arising from our ownership structure with a controlling stockholder; and other factors described in our news releases and filings with the Securities and Exchange Commission, including but not limited to our most recent Annual Report on Form 10-K and reports on Form 10-Q and Form 8-K. There may be additional risks, uncertainties and factors that we do not currently view as material or that are not necessarily known. The forward-looking statements included in this communication are made only as of the date of this communication, and we do not undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.

 

VIACOMCBS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share amounts)

 
 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2021

 

2020

 

2021

 

2020

Revenues

$

6,610

   

$

5,837

   

$

20,586

   

$

18,411

 

Costs and expenses:

             

Operating

4,064

   

3,462

   

12,292

   

10,779

 

Selling, general and administrative

1,526

   

1,323

   

4,407

   

3,804

 

Depreciation and amortization

95

   

97

   

289

   

331

 

Restructuring and other corporate matters

46

   

52

   

81

   

441

 

Total costs and expenses

5,731

   

4,934

   

17,069

   

15,355

 

Net gain on sales

   

   

116

   

 

Operating income

879

   

903

   

3,633

   

3,056

 

Interest expense

(243)

   

(259)

   

(745)

   

(763)

 

Interest income

11

   

14

   

37

   

39

 

Net gains (losses) from investments

(5)

   

   

47

   

32

 

Loss on extinguishment of debt

   

(23)

   

(128)

   

(126)

 

Other items, net

(26)

   

(20)

   

(55)

   

(74)

 

Earnings from continuing operations before income taxes and equity

   in loss of investee companies

616

   

615

   

2,789

   

2,164

 

Provision for income taxes

(120)

   

(26)

   

(312)

   

(352)

 

Equity in loss of investee companies, net of tax

(18)

   

(9)

   

(80)

   

(30)

 

Net earnings from continuing operations

478

   

580

   

2,397

   

1,782

 

Net earnings from discontinued operations, net of tax

73

   

47

   

126

   

90

 

Net earnings (ViacomCBS and noncontrolling interests)

551

   

627

   

2,523

   

1,872

 

Net earnings attributable to noncontrolling interests

(13)

   

(12)

   

(38)

   

(260)

 

Net earnings attributable to ViacomCBS

$

538

   

$

615

   

$

2,485

   

$

1,612

 
               

Amounts attributable to ViacomCBS:

             

Net earnings from continuing operations

$

465

   

$

568

   

$

2,359

   

$

1,522

 

Net earnings from discontinued operations, net of tax

73

   

47

   

126

   

90

 

Net earnings attributable to ViacomCBS

$

538

   

$

615

   

$

2,485

   

$

1,612

 
               

Basic net earnings per common share attributable to ViacomCBS:

             

Net earnings from continuing operations

$

.70

   

$

.92

   

$

3.65

   

$

2.47

 

Net earnings from discontinued operations

$

.11

   

$

.08

   

$

.20

   

$

.15

 

Net earnings

$

.81

   

$

1.00

   

$

3.85

   

$

2.62

 
               

Diluted net earnings per common share attributable to ViacomCBS: (a)

             

Net earnings from continuing operations

$

.69

   

$

.92

   

$

3.62

   

$

2.47

 

Net earnings from discontinued operations

$

.11

   

$

.08

   

$

.20

   

$

.15

 

Net earnings

$

.80

   

$

1.00

   

$

3.81

   

$

2.61

 
               

Weighted average number of common shares outstanding:

             

Basic

646

   

616

   

638

   

615

 

Diluted

651

   

618

   

644

   

617

 
 

(a) Diluted net earnings per common share ("EPS") for the three and nine months ended September 30, 2021, excludes the effect of the assumed conversion of our 5.75% Series A Mandatory Convertible Preferred Stock to shares of common stock since it would have been antidilutive. As a result, in the calculations of diluted EPS the weighted average number of diluted shares outstanding does not include the assumed issuance of shares upon conversion of preferred stock, and preferred stock dividends recorded during the three and nine months ended September 30, 2021 of $14 million and $30 million, respectively, are deducted from net earnings from continuing operations and net earnings, as applicable.

 

 

 

VIACOMCBS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except per share amounts)

 
 

At

 

At

 

September 30, 2021

 

December 31, 2020

ASSETS

             

Current Assets:

             

Cash and cash equivalents

 

$

4,823

       

$

2,984

   

Receivables, net

 

6,560

       

7,017

   

Programming and other inventory

 

1,563

       

1,757

   

Prepaid expenses and other current assets

 

1,230

       

1,391

   

Current assets of discontinued operations

 

622

       

630

   

Total current assets

 

14,798

       

13,779

   

Property and equipment, net

 

1,809

       

1,994

   

Programming and other inventory

 

12,564

       

10,363

   

Goodwill

 

16,582

       

16,612

   

Intangible assets, net

 

2,790

       

2,826

   

Operating lease assets

 

1,511

       

1,602

   

Deferred income tax assets, net

 

1,221

       

993

   

Other assets

 

3,622

       

3,657

   

Assets held for sale

 

207

       

28

   

Assets of discontinued operations

 

808

       

809

   

Total Assets

 

$

55,912

       

$

52,663

   

LIABILITIES AND STOCKHOLDERS' EQUITY

             

Current Liabilities:

             

Accounts payable

 

$

827

       

$

571

   

Accrued expenses

 

1,878

       

1,714

   

Participants' share and royalties payable

 

2,099

       

2,005

   

Accrued programming and production costs

 

1,397

       

1,141

   

Deferred revenues

 

1,074

       

978

   

Debt

 

15

       

16

   

Other current liabilities

 

1,138

       

1,391

   

Current liabilities of discontinued operations

 

485

       

480

   

Total current liabilities

 

8,913

       

8,296

   

Long-term debt

 

17,696

       

19,717

   

Participants' share and royalties payable

 

1,228

       

1,317

   

Pension and postretirement benefit obligations

 

1,966

       

2,098

   

Deferred income tax liabilities, net

 

965

       

778

   

Operating lease liabilities

 

1,525

       

1,583

   

Program rights obligations

 

291

       

243

   

Other liabilities

 

1,948

       

2,158

   

Liabilities of discontinued operations

 

208

       

220

   

Redeemable noncontrolling interest

 

103

       

197

   
               

Commitments and contingencies

             
               

ViacomCBS stockholders' equity:

             

5.75% Series A Mandatory Convertible Preferred Stock, par value $.001 per share;

    25 shares authorized and 10 shares issued (2021)

 

       

   

Class A Common Stock, par value $.001 per share; 55 shares authorized;

    41 (2021) and 52 (2020) shares issued

 

       

   

Class B Common Stock, par value $.001 per share; 5,000 shares authorized;

    1,108 (2021) and 1,068 (2020) shares issued

 

1

       

1

   

Additional paid-in capital

 

32,943

       

29,785

   

Treasury stock, at cost; 503 (2021 and 2020) Class B shares

 

(22,958)

       

(22,958)

   

Retained earnings

 

12,456

       

10,375

   

Accumulated other comprehensive loss

 

(1,883)

       

(1,832)

   

Total ViacomCBS stockholders' equity

 

20,559

       

15,371

   

Noncontrolling interests

 

510

       

685

   

Total Equity

 

21,069

       

16,056

   

Total Liabilities and Equity

 

$

55,912

       

$

52,663

   
 

 

VIACOMCBS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

 
 

Nine Months Ended

 

September 30,

 

2021

 

2020

Operating Activities:

     

Net earnings (ViacomCBS and noncontrolling interests)

$

2,523

   

$

1,872

 

Less: Net earnings from discontinued operations, net of tax

126

   

90

 

Net earnings from continuing operations

2,397

   

1,782

 

Adjustments to reconcile net earnings from continuing operations to net cash flow provided

     by operating activities:

     

Depreciation and amortization

289

   

331

 

Deferred tax (benefit) provision

(21)

   

187

 

Stock-based compensation

154

   

188

 

Net gain on sales

(116)

   

 

Gains from investments

(47)

   

(32)

 

Loss on extinguishment of debt

128

   

126

 

Equity in loss of investee companies, net of tax and distributions

80

   

34

 

Change in assets and liabilities

(1,336)

   

(62)

 

Net cash flow provided by operating activities from continuing operations

1,528

   

2,554

 

Net cash flow provided by operating activities from discontinued operations

124

   

11

 

Net cash flow provided by operating activities

1,652

   

2,565

 

Investing Activities:

     

Investments

(147)

   

(60)

 

Capital expenditures

(231)

   

(210)

 

Acquisitions, net of cash acquired

(27)

   

(142)

 

Proceeds from dispositions

418

   

146

 

Other investing activities

(26)

   

 

Net cash flow used for investing activities from continuing operations

(13)

   

(266)

 

Net cash flow used for investing activities from discontinued operations

(3)

   

(3)

 

Net cash flow used for investing activities

(16)

   

(269)

 

Financing Activities:

     

Repayments of short-term debt borrowings, net

   

(706)

 

Proceeds from issuance of long-term debt

   

4,365

 

Repayment of long-term debt

(2,220)

   

(2,896)

 

Dividends paid on preferred stock

(15)

   

 

Dividends paid on common stock

(458)

   

(450)

 

Proceeds from issuance of preferred stock

983

   

 

Proceeds from issuance of common stock

1,672

   

 

Purchase of Company common stock

   

(58)

 

Payment of payroll taxes in lieu of issuing shares for stock-based compensation

(55)

   

(62)

 

Proceeds from exercise of stock options

408

   

 

Payments to noncontrolling interests

(215)

   

(44)

 

Other financing activities

1

   

(43)

 

Net cash flow provided by financing activities

101

   

106

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(30)

   

(6)

 

Net increase in cash, cash equivalents and restricted cash

1,707

   

2,396

 

Cash, cash equivalents and restricted cash at beginning of period

   (includes $135 (2021) and $202 (2020) of restricted cash)

3,119

   

834

 

Cash, cash equivalents and restricted cash at end of period

   (includes $3 (2021) and $138 (2020) of restricted cash, and $6 (2020) of assets

     held for sale)

$

4,826

   

$

3,230

 
 

 

 

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES
(Unaudited; in millions, except per share amounts)

Results for the three and nine months ended September 30, 2021 and 2020 included certain items identified as affecting comparability. Adjusted operating income before depreciation and amortization ("Adjusted OIBDA"), adjusted earnings from continuing operations before income taxes, adjusted provision for income taxes, adjusted net earnings from continuing operations attributable to ViacomCBS, and adjusted diluted EPS from continuing operations (together, the "adjusted measures") exclude the impact of these items and are measures of performance not calculated in accordance with accounting principles generally accepted in the United States of America ("GAAP"). We use these measures to, among other things, evaluate our operating performance. These measures are among the primary measures used by management for planning and forecasting of future periods, and they are important indicators of our operational strength and business performance. In addition, we use Adjusted OIBDA to, among other things, value prospective acquisitions. We believe these measures are relevant and useful for investors because they allow investors to view performance in a manner similar to the method used by our management; provide a clearer perspective on our underlying performance; and make it easier for investors, analysts and peers to compare our operating performance to other companies in our industry and to compare our year-over-year results.

Because the adjusted measures are measures of performance not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, operating income, earnings from continuing operations before income taxes, provision/benefit for income taxes, net earnings from continuing operations attributable to ViacomCBS or diluted EPS from continuing operations, as applicable, as indicators of operating performance. These measures, as we calculate them, may not be comparable to similarly titled measures employed by other companies.

The following tables reconcile the adjusted measures to their most directly comparable financial measures in accordance with GAAP.

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2021

 

2020

 

2021

 

2020

Operating income (GAAP)

$

879

   

$

903

   

$

3,633

   

$

3,056

 

Depreciation and amortization (a)

95

   

97

   

289

   

331

 

Restructuring and other corporate matters (b)

46

   

52

   

81

   

441

 

Programming charges (b)

   

   

   

121

 

Net gain on sales (b)

   

   

(116)

   

 

Adjusted OIBDA (Non-GAAP)

$

1,020

   

$

1,052

   

$

3,887

   

$

3,949

 
 

(a) The nine months ended September 30, 2020 include an impairment charge for FCC licenses of $25 million and accelerated depreciation of $12 million for technology that was abandoned in connection with synergy plans related to the merger of Viacom Inc. with and into CBS Corporation (the "Merger").

(b) See notes on the following tables for additional information on items affecting comparability.

 

 

 

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued)

(Unaudited; in millions, except per share amounts)

 

 
 

Three Months Ended September 30, 2021

 

Earnings from Continuing Operations Before Income Taxes

 

Provision for Income Taxes

 

Net Earnings from Continuing Operations Attributable to ViacomCBS

 

Diluted EPS from Continuing Operations

Reported (GAAP)

 

$

616

       

$

(120)

       

$

465

       

$

.69

   

Items affecting comparability:

                             

Restructuring and other corporate matters (a)

 

46

       

(12)

       

34

       

.05

   

Loss from investments (b)

 

5

       

(1)

       

4

       

.01

   

Pension settlement charge (c)

 

10

       

(2)

       

8

       

.01

   

Discrete tax items

 

       

(1)

       

(1)

       

   

Adjusted (Non-GAAP)

 

$

677

       

$

(136)

       

$

510

       

$

.76

   
 

(a) Reflects severance costs associated with changes in management at certain of our businesses.

(b) Reflects the change in fair value of an investment which was sold during the quarter.

(c) Reflects the accelerated recognition of a portion of the unamortized actuarial losses due to the volume of lump sum benefit payments in one of our pension plans.

 

 

 

Three Months Ended September 30, 2020

 

Earnings from Continuing Operations Before Income Taxes

 

Provision for Income Taxes

 

Net Earnings from Continuing Operations Attributable to ViacomCBS

 

Diluted EPS from Continuing Operations

Reported (GAAP)

 

$

615

       

$

(26)

       

$

568

       

$

.92

   

Items affecting comparability:

                             

Restructuring and other corporate matters (a)

 

52

       

(12)

       

40

       

.06

   

Loss on extinguishment of debt

 

23

       

(5)

       

18

       

.03

   

Discrete tax items (b)

 

       

(119)

       

(119)

       

(.19)

   

Impairment of an equity-method investment

 

       

       

9

       

.01

   

Adjusted (Non-GAAP)

 

$

690

       

$

(162)

       

$

516

       

$

.83

   
 

(a) Reflects severance, exit costs and other costs related to the Merger.

(b) Primarily reflects a benefit from the remeasurement of our UK net deferred income tax asset as a result of an increase in the UK corporate income tax rate from 17% to 19% enacted during the third quarter of 2020.

 

 

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES (Continued)

(Unaudited; in millions, except per share amounts)

 
 

Nine Months Ended September 30, 2021

 

Earnings from Continuing Operations Before Income Taxes

 

Provision for Income Taxes

 

Net Earnings from Continuing Operations Attributable to ViacomCBS

 

Diluted EPS from Continuing Operations

Reported (GAAP)

 

$

2,789

       

$

(312)

       

$

2,359

       

$

3.62

   

Items affecting comparability:

                             

Restructuring and other corporate matters (a)

 

81

       

(20)

       

61

       

.10

   

Net gain on sales (b)

 

(116)

       

27

       

(89)

       

(.14)

   

Gains from investments (c)

 

(47)

       

11

       

(36)

       

(.06)

   

Loss on extinguishment of debt

 

128

       

(30)

       

98

       

.15

   

Pension settlement charge (d)

 

10

       

(2)

       

8

       

.01

   

Discrete tax items (e)

 

       

(290)

       

(290)

       

(.45)

   

Adjusted (Non-GAAP)

 

$

2,845

       

$

(616)

       

$

2,111

       

$

3.23

   
 

(a) Reflects severance costs associated with changes in management at certain of our businesses and the impairment of lease assets in connection with cost transformation initiatives related to the Merger.

(b) Primarily reflects a gain on the sale of a noncore trademark licensing operation.

(c) Reflects a gain of $37 million on the sale of an investment and an increase in the fair value of an investment which was sold during the third quarter.

(d) Reflects the accelerated recognition of a portion of the unamortized actuarial losses due to the volume of lump sum benefit payments in one of our pension plans.

(e) Primarily reflects a benefit of $260 million to remeasure our UK net deferred income tax asset as a result of the enactment during the quarter of an increase in the UK corporate income tax rate from 19% to 25% beginning April 1, 2023, as well as a net tax benefit in connection with the settlement of income tax audits.

 

 

 

Nine Months Ended September 30, 2020

 

Earnings from Continuing Operations Before Income Taxes

 

Provision for Income Taxes

 

Net Earnings from Continuing Operations Attributable to ViacomCBS

 

Diluted EPS from Continuing Operations

Reported (GAAP)

 

$

2,164

       

$

(352)

       

$

1,522

       

$

2.47

   

Items affecting comparability:

                             

Restructuring and other corporate matters (a)

 

441

       

(93)

       

348

       

.57

   

Impairment charge (b)

 

25

       

(6)

       

19

       

.03

   

Depreciation of abandoned technology (c)

 

12

       

(3)

       

9

       

.01

   

Programming charges (d)

 

121

       

(29)

       

92

       

.15

   

Gains from investments (e)

 

(32)

       

8

       

(24)

       

(.04)

   

Loss on extinguishment of debt

 

126

       

(29)

       

97

       

.16

   

Discrete tax items (f)

 

       

(122)

       

(122)

       

(.20)

   

Impairment of an equity-method investment

 

       

       

9

       

.01

   

Adjusted (Non-GAAP)

 

$

2,857

       

$

(626)

       

$

1,950

       

$

3.16

   
 

(a) Reflects severance, exit and other costs related to the Merger and a charge to write down property and equipment to its fair value less costs to sell.

(b) Reflects a charge to reduce the carrying values of FCC licenses in two markets to their fair values.

(c) Reflects accelerated depreciation for technology that was abandoned in connection with synergy plans related to the Merger.

(d) Primarily related to the abandonment of certain incomplete programs resulting from production shutdowns related to COVID-19.

(e) Reflects an increase to the carrying value of an investment based on the market price of a similar investment.

(f) Primarily reflects a benefit from the remeasurement of our UK net deferred income tax asset as a result of an increase in the UK corporate income tax rate from 17% to 19% enacted during the third quarter of 2020.